A Bull or a Bear Case for Bitcoin?
If anything is clear about BTC amidst all the recent market chop, it’s that the king of crypto is locked in a downtrend. Since the beginning of the month, Bitcoin has been posting lower highs and printing lower lows at a barely perceptible rate, making it easy to be blind to the danger if you’re waiting for a turnaround.
Historically, the cryptocurrency market enjoys a strong spring performance before neutralizing its gains for the duration of the summer. This year appears to be no different. Around the world, summer kicked off later than usual with the clouds finally ebbing in recent weeks. However, the brighter the sun gets, the more crypto’s once green candles shrink away from the light, turning red in the process.
On the whole, our analysts are bearish on BTC’s short term prospects. A revisit to the $8K range seems most likely, with a specific target of $8.2K. In the bearish Gann square chart below, we’ve outlined four areas where we expect to see price action in the coming weeks. As you can see, the $6.6K to $9K range is projected to be a busy one PA wise, whereas the odds of getting up and over $11K are diminishing.
Also of note is the degree to which daily trading volume across all major crypto markets has dried up. During the last two years $14 billion in daily trading volume was a significant win for BTC – these days, it represents a drop in the bucket. A positive takeaway is that this chop and drop period for Bitcoin isn’t happening on high volume, which would signal a dump. Instead, we take it as a signal that buyer interest at higher prices is waning in the face of exhaustion after a parabolic bull run that lasted for several months.
If anything is clear about BTC amidst all the recent market chop, it’s that the king of crypto is locked in a downtrend. Since the beginning of the month, Bitcoin has been posting lower highs and printing lower lows at a barely perceptible rate, making it easy to be blind to the danger if you’re waiting for a turnaround.
Historically, the cryptocurrency market enjoys a strong spring performance before neutralizing its gains for the duration of the summer. This year appears to be no different. Around the world, summer kicked off later than usual with the clouds finally ebbing in recent weeks. However, the brighter the sun gets, the more crypto’s once green candles shrink away from the light, turning red in the process.
On the whole, our analysts are bearish on BTC’s short term prospects. A revisit to the $8K range seems most likely, with a specific target of $8.2K. In the bearish Gann square chart below, we’ve outlined four areas where we expect to see price action in the coming weeks. As you can see, the $6.6K to $9K range is projected to be a busy one PA wise, whereas the odds of getting up and over $11K are diminishing.
Also of note is the degree to which daily trading volume across all major crypto markets has dried up. During the last two years $14 billion in daily trading volume was a significant win for BTC – these days, it represents a drop in the bucket. A positive takeaway is that this chop and drop period for Bitcoin isn’t happening on high volume, which would signal a dump. Instead, we take it as a signal that buyer interest at higher prices is waning in the face of exhaustion after a parabolic bull run that lasted for several months.
How Low Can You Go?
After wicking to just over $10,000 on Friday, BTC provided us with another reliably volatile drop to $9,100. The whole play was done and dusted within 48 hours, and most certainly took no one by surprise. The first rule of BTC is that prolific price swings are a fact of life, so itʼs best to do two things:
1. Accept that they happen
2. Profit from them
We previously called your attention to the $9,500 mark as a battleground for the short term fortunes of BTC. A drop below meant that the likelihood of heading for the $8K region became greater while maintenance above signaled a modicum of strength.
Bulls have admirably defended the short term hopes of BTC, but, unfortunately, appear to be undergoing a slow-motion rout from the battlefield. Bitcoinʼs repeated forays below $9,500 have shown that the bears clearly have the upper hand.
Considering that weʼre currently experiencing yet another test of $9K- $9.5K, one has to wonder how much longer it can hold. Below youʼll find an updated Gann Square which gives a neat and easy to understand visual analysis of BTCʼs likely targets. A huge chunk of real estate belongs to the region between $6,600-$9,000.
Within that region, there is a large confluence of support between $8.2K-$8.8K, and yet again from $7K-$7.4K. These are crucial levels that will tell about the depth of the current market reversal and whether bulls are in for a long hibernation.
Ethereum ($ETH) Price Analysis
Ethereum hasnʼt played up to expectations this year and has lagged behind BTCʼs performance on several occasions. After running up to $350, ETH was strongly rejected and has since dropped by over 50%. ETH has tested $195 and found support there. However, should it fail on a retest, weʼll likely land between $157-$170.
With the bulk of Ethereumʼs fundamentals a long way off, there isnʼt much to look forward to in the short term. ETH 2.0, the next milestone upgrade for the network, hasnʼt been given a clear release schedule. Conflicting estimates from Ethereum developers have alternately given late 2020 and as late as 2022 as potential debut dates.
IRS Sending Letters to Crypto Owners
In a scare tactic that warrants a class-action lawsuit, the IRS has begun sending letters to US taxpayers. The agency has stated that itʼs targeting 10,000 taxpayers with the first round of letters, and that, according to IRS Commissioner Chuck Rettig, they should “take these letters very seriously.”
Several users on /r/bitcoin as well as /r/cryptocurrency have posted pictures of the letters they received from the IRS. While short on details, the letters essentially say that the agency is aware that the recipient has transacted “virtual currencies” and that they “may not have met U.S. tax filing and reporting requirements” regarding them.
Weʼll keep you updated on the story as it develops.
After wicking to just over $10,000 on Friday, BTC provided us with another reliably volatile drop to $9,100. The whole play was done and dusted within 48 hours, and most certainly took no one by surprise. The first rule of BTC is that prolific price swings are a fact of life, so itʼs best to do two things:
1. Accept that they happen
2. Profit from them
We previously called your attention to the $9,500 mark as a battleground for the short term fortunes of BTC. A drop below meant that the likelihood of heading for the $8K region became greater while maintenance above signaled a modicum of strength.
Bulls have admirably defended the short term hopes of BTC, but, unfortunately, appear to be undergoing a slow-motion rout from the battlefield. Bitcoinʼs repeated forays below $9,500 have shown that the bears clearly have the upper hand.
Considering that weʼre currently experiencing yet another test of $9K- $9.5K, one has to wonder how much longer it can hold. Below youʼll find an updated Gann Square which gives a neat and easy to understand visual analysis of BTCʼs likely targets. A huge chunk of real estate belongs to the region between $6,600-$9,000.
Within that region, there is a large confluence of support between $8.2K-$8.8K, and yet again from $7K-$7.4K. These are crucial levels that will tell about the depth of the current market reversal and whether bulls are in for a long hibernation.
Ethereum ($ETH) Price Analysis
Ethereum hasnʼt played up to expectations this year and has lagged behind BTCʼs performance on several occasions. After running up to $350, ETH was strongly rejected and has since dropped by over 50%. ETH has tested $195 and found support there. However, should it fail on a retest, weʼll likely land between $157-$170.
With the bulk of Ethereumʼs fundamentals a long way off, there isnʼt much to look forward to in the short term. ETH 2.0, the next milestone upgrade for the network, hasnʼt been given a clear release schedule. Conflicting estimates from Ethereum developers have alternately given late 2020 and as late as 2022 as potential debut dates.
IRS Sending Letters to Crypto Owners
In a scare tactic that warrants a class-action lawsuit, the IRS has begun sending letters to US taxpayers. The agency has stated that itʼs targeting 10,000 taxpayers with the first round of letters, and that, according to IRS Commissioner Chuck Rettig, they should “take these letters very seriously.”
Several users on /r/bitcoin as well as /r/cryptocurrency have posted pictures of the letters they received from the IRS. While short on details, the letters essentially say that the agency is aware that the recipient has transacted “virtual currencies” and that they “may not have met U.S. tax filing and reporting requirements” regarding them.
Weʼll keep you updated on the story as it develops.
Will a Recession Sink the Cryptocurrency Market?
In a tumultuous day of trading, the Dow crashed by 800 points, yesterday, as an ominous recession indicator came to life. For the first time since 2007, 10-year bond yields dipped below 2-year bond yields 😵.
For the record, every time that happened in the last 50 years, a recession followed 📉. We’re the first ones to say that past performance doesn’t indicate future results, but hey, you’ve got to admit that’s a pretty rockin’ track record.
It isn’t just the US standing on the cusp of what seems like an impending recession. Bloomberg had this to say in wrapping up the world’s financial woes:
“China reported the weakest growth in industrial output since 2002. Germany’s economy shrank as exports slumped, and euro-area production plunged the most in more than three years as the overall expansion cooled.”
So, yeah, not looking too hot out there. What does it mean for the cryptocurrency market? Yesterday, BTC dropped below $10,200 while ETH, XRP, EOS, TRX, XTZ, and several other blue chips fell off the proverbial cliff. For anyone who is keen to think that crypto markets are decoupled from traditional markets – think again 😳.
At a very fundamental level, the fortunes of all markets are tied together by whichever is the true hegemonic power. While we love crypto, it would be an outright lie for us to claim that digital assets assume more importance, economically speaking, than traditional global markets. With a total market cap that is less than Amazon’s, the cryptocurrency market pales in comparison to global stock markets, which are valued somewhere north of $60 trillion.
Bitcoin is just a drop in the bucket compared to the squidzillions at play in the bigger picture around the world. For those of you who, like us, are living and breathing crypto every day, this may be a hard fact to accept. However, being aware of it will strengthen your position and keep your hand steady. There is nothing financially worse than being caught by surprise.
BTC may act as a store of value during a recession
Bitcoin was born along with the last global recession back in 2008. Satoshi understood the ill effects of centralized finance and knew that bankers were sending the world economy straight for the dumpster.
While the Great Recession hit hard in countries around the world, BTC gained notoriety at first, and then real value right around 2013, when signs of relief from the recession first flickered. The rest of the digital asset market as we know it today emerged during a period of economic expansion and rebuilding in the US, Asia, and many European countries.
As such, the cryptocurrency market hasn’t faced a real recession, so predicting how it will react to a global economic downturn is more or less impossible. However, without recession fears at hand for last year and most of this one, altcoins have performed dismally. It’s highly doubtful that a downturn of the kind anticipated will help matters on that score.
Bitcoin, on the other hand, may perform better than expected. Safe-haven assets like gold and bonds have rallied in recent days. In 2008, the USD jumped nearly 20% against other currencies. Can Bitcoin make a safe-haven case? 🤔
Well…“Bitcoin is a remarkably stable and reliable store of value” said no one ever. With all due respect to Anthony Pompliano, it’s possible to be bullish on both Bitcoin and reality.
Look, we definitely puff puff pass the crypto hopium 🙏. But believing that people everywhere will suddenly flee for safety into an asset class based on bleeding edge tech defies reason. Then again, if Bitcoin has done anything well over the last decade, it’s defy reason.
Bitcoin’s drop yesterday was understandable. If someone says recession, everyone jumps back. The coming weeks and months will be crucial, though. Do we trend higher as hopes for the global economy sink further? That’s for time to tell.
In a tumultuous day of trading, the Dow crashed by 800 points, yesterday, as an ominous recession indicator came to life. For the first time since 2007, 10-year bond yields dipped below 2-year bond yields 😵.
For the record, every time that happened in the last 50 years, a recession followed 📉. We’re the first ones to say that past performance doesn’t indicate future results, but hey, you’ve got to admit that’s a pretty rockin’ track record.
It isn’t just the US standing on the cusp of what seems like an impending recession. Bloomberg had this to say in wrapping up the world’s financial woes:
“China reported the weakest growth in industrial output since 2002. Germany’s economy shrank as exports slumped, and euro-area production plunged the most in more than three years as the overall expansion cooled.”
So, yeah, not looking too hot out there. What does it mean for the cryptocurrency market? Yesterday, BTC dropped below $10,200 while ETH, XRP, EOS, TRX, XTZ, and several other blue chips fell off the proverbial cliff. For anyone who is keen to think that crypto markets are decoupled from traditional markets – think again 😳.
At a very fundamental level, the fortunes of all markets are tied together by whichever is the true hegemonic power. While we love crypto, it would be an outright lie for us to claim that digital assets assume more importance, economically speaking, than traditional global markets. With a total market cap that is less than Amazon’s, the cryptocurrency market pales in comparison to global stock markets, which are valued somewhere north of $60 trillion.
Bitcoin is just a drop in the bucket compared to the squidzillions at play in the bigger picture around the world. For those of you who, like us, are living and breathing crypto every day, this may be a hard fact to accept. However, being aware of it will strengthen your position and keep your hand steady. There is nothing financially worse than being caught by surprise.
BTC may act as a store of value during a recession
Bitcoin was born along with the last global recession back in 2008. Satoshi understood the ill effects of centralized finance and knew that bankers were sending the world economy straight for the dumpster.
While the Great Recession hit hard in countries around the world, BTC gained notoriety at first, and then real value right around 2013, when signs of relief from the recession first flickered. The rest of the digital asset market as we know it today emerged during a period of economic expansion and rebuilding in the US, Asia, and many European countries.
As such, the cryptocurrency market hasn’t faced a real recession, so predicting how it will react to a global economic downturn is more or less impossible. However, without recession fears at hand for last year and most of this one, altcoins have performed dismally. It’s highly doubtful that a downturn of the kind anticipated will help matters on that score.
Bitcoin, on the other hand, may perform better than expected. Safe-haven assets like gold and bonds have rallied in recent days. In 2008, the USD jumped nearly 20% against other currencies. Can Bitcoin make a safe-haven case? 🤔
Well…“Bitcoin is a remarkably stable and reliable store of value” said no one ever. With all due respect to Anthony Pompliano, it’s possible to be bullish on both Bitcoin and reality.
Look, we definitely puff puff pass the crypto hopium 🙏. But believing that people everywhere will suddenly flee for safety into an asset class based on bleeding edge tech defies reason. Then again, if Bitcoin has done anything well over the last decade, it’s defy reason.
Bitcoin’s drop yesterday was understandable. If someone says recession, everyone jumps back. The coming weeks and months will be crucial, though. Do we trend higher as hopes for the global economy sink further? That’s for time to tell.
Bakkt in Business
Regarding the noscript of this update…well, sorry, we just couldn’t help ourselves. Glad to have you with us on this fine Monday afternoon, morning, night, or hell, maybe it’s even Tuesday where you are.
Yesterday, Bakkt announced it would open physically-settled futures trading on September 23. That’s only about a year later than anticipated, but better late than never, right? Now, the skeptics out there are saying (with a smug smile, no doubt) that since Bakkt already delayed several times, nothing is keeping them from doing so again.
After all, this isn’t the first (or second) time Bakkt has hit us with a date for release. However, optimists that we are, we think it’s different this time.
Bakkt is a Big Deal
Bakkt is bringing two massive infrastructural changes to the crypto table. On their own, each would be a big deal, but together – well, that’s what really gets us excited.
1. Bitcoin Warehousing: Institutions want to buy Bitcoin, but they have no idea how to store it. Even if they did, they want someone else to be responsible for it in case something happens. Typical, but understandable. Bakkt is providing warehousing for physically-settled Bitcoin futures for exactly that reason, and it should be the icing on the cake for institutions who have been sitting on the sidelines so far.
2. Physically-settled futures: Back in 2017, everyone got super excited about CBOE futures, only to realize way too late (see: after the dump) that these futures had almost nothing to do with actual BTC. Physically-settled futures change all that. Instead of being settled in cash, these BTC futures actually deal in the asset itself – it needs to be held as part of the futures contract.
In this one-two setup, we’ve got a reason and way for institutions to buy BTC, even if for purely speculative purposes, and we’ve got qualified custodianship in the warehouse. The whole thing is such an obvious win for the crypto space.
We said that Bakkt dropping a date is different this time. Why is that, you ask? Because before, Bakkt waited for the CFTC to drop in and approve the custodianship angle, but after waiting and waiting, it never materialized.
So, Bakkt changed tack and went after the New York State Department of Financial Services for the green light. The September 23 live date is a result of that shift, and New York’s willingness to get the job done.
You can read Bakkt’s official statement about it all here: https://medium.com/bakkt-blog/cleared-to-launch–8dfc3e6f9ed0
Who Says Altcoins Aren’t Getting Adopted?
Altcoins have (understandably) been taking a lot of heat from HODLers. After doing nothing but lose sat value for the better part of 1.5 years, it’s tricky to stay upbeat about them.
And yet, there’s a delicate balance to maintain between becoming jaded and going overly optimistic. Zcoin is a perfect example of the benefits of keeping an eye on the right projects. Two days ago, the Zcoin team announced a major partnership with Satang App, a Thai payment app with five million merchants already on board.
The result of the partnership is that XZC is now spendable with those millions of merchants by Satang App’s estimated 50 million person userbase. Had you completely checked out of the crypto news cycle, you’d have easily missed this, despite potentially maintaining that no one uses crypto.
It’s the little things that count – they add up and make the big picture even sweeter.
Regarding the noscript of this update…well, sorry, we just couldn’t help ourselves. Glad to have you with us on this fine Monday afternoon, morning, night, or hell, maybe it’s even Tuesday where you are.
Yesterday, Bakkt announced it would open physically-settled futures trading on September 23. That’s only about a year later than anticipated, but better late than never, right? Now, the skeptics out there are saying (with a smug smile, no doubt) that since Bakkt already delayed several times, nothing is keeping them from doing so again.
After all, this isn’t the first (or second) time Bakkt has hit us with a date for release. However, optimists that we are, we think it’s different this time.
Bakkt is a Big Deal
Bakkt is bringing two massive infrastructural changes to the crypto table. On their own, each would be a big deal, but together – well, that’s what really gets us excited.
1. Bitcoin Warehousing: Institutions want to buy Bitcoin, but they have no idea how to store it. Even if they did, they want someone else to be responsible for it in case something happens. Typical, but understandable. Bakkt is providing warehousing for physically-settled Bitcoin futures for exactly that reason, and it should be the icing on the cake for institutions who have been sitting on the sidelines so far.
2. Physically-settled futures: Back in 2017, everyone got super excited about CBOE futures, only to realize way too late (see: after the dump) that these futures had almost nothing to do with actual BTC. Physically-settled futures change all that. Instead of being settled in cash, these BTC futures actually deal in the asset itself – it needs to be held as part of the futures contract.
In this one-two setup, we’ve got a reason and way for institutions to buy BTC, even if for purely speculative purposes, and we’ve got qualified custodianship in the warehouse. The whole thing is such an obvious win for the crypto space.
We said that Bakkt dropping a date is different this time. Why is that, you ask? Because before, Bakkt waited for the CFTC to drop in and approve the custodianship angle, but after waiting and waiting, it never materialized.
So, Bakkt changed tack and went after the New York State Department of Financial Services for the green light. The September 23 live date is a result of that shift, and New York’s willingness to get the job done.
You can read Bakkt’s official statement about it all here: https://medium.com/bakkt-blog/cleared-to-launch–8dfc3e6f9ed0
Who Says Altcoins Aren’t Getting Adopted?
Altcoins have (understandably) been taking a lot of heat from HODLers. After doing nothing but lose sat value for the better part of 1.5 years, it’s tricky to stay upbeat about them.
And yet, there’s a delicate balance to maintain between becoming jaded and going overly optimistic. Zcoin is a perfect example of the benefits of keeping an eye on the right projects. Two days ago, the Zcoin team announced a major partnership with Satang App, a Thai payment app with five million merchants already on board.
The result of the partnership is that XZC is now spendable with those millions of merchants by Satang App’s estimated 50 million person userbase. Had you completely checked out of the crypto news cycle, you’d have easily missed this, despite potentially maintaining that no one uses crypto.
It’s the little things that count – they add up and make the big picture even sweeter.
Like a wearying prizefighter, BTC is doggedly remaining in the ring despite appearances of fading energy.
BTC is currently trading at just a touch above $10,053. It fell abruptly to this level after a swift rejection during its pursuit of $11K zone. That attempt, though promising, was done on unconvincing volume.
Even now, volume remains shallow, signaling disinterest around current prices. However, despite this interruption of BTC’s march toward the moon, like Agent Mulder in the X-Files, we want to believe.
Bitcoin’s narrative, which has been lacking in recent weeks, is beginning to regain strength as Bakkt comes into the frame along with an ETF decision looming on the horizon. Bakkt’s physically-settled bitcoin futures are due to go live on September 23, and shortly after, on October 19, is the SEC’s final deadline for ruling on the VanEck/SolidX Bitcoin ETF.
Of the various proposals delivered to the SEC, the VanEck/SolidX ETF is roundly believed to have the best odds for approval. Market sentiment needs a narrative. Without an objective on the horizon, even if it’s a source of insecurity (such as the ETF, which hinges on a yes or no answer), sentiment falls away along with interest.
To see how much interest has waned since BTC fell away from its parabolic advance, check the Google Trend chart at the bottom of this post.
However, Bitcoin values may stabilize in time based on an often-overlooked aspect of the cryptocurrency financial ecosystem: cryptocurrency loans.
Crypto Loan Industry Hitting All-Time Highs
Crypto-collateralized loans are going from peak to peak as they lock-in value in the crypto-financial ecosystem. Graychain, the world’s first crypto credit bureau, recently released a report detailing the estimated $5 billion crypto loans that have gone out to borrowers up to now.
The way crypto collateralized loans work is simple. Say you want to take out a loan – you choose a lender like Celsius, Nexo, Unchained, or the various other companies available, then deposit your crypto on the platform. You’ll need to deposit crypto worth roughly 2x the loan amount (i.e., for a loan of $10,000 you’ll need to deposit $20,000 worth of collateral).
Part of the appeal behind crypto loans is that you don’t need to worry about credit or employment checks – the only thing that matters is that you’ve got the crypto to back the loan. Even if you don’t, there are some companies, like Salt Lending, who let you get away with riskier loan terms.
What all this means for the crypto ecosystem is that more and more people are locking in BTC, ETH, LTC, XRP, BCH, and other leading digital currencies for the duration of a loan term. Loan terms are commonly between 12 and 36 months.
It’s not only borrowers who are improving the HODL ratio of crypto. Lenders are enjoying the benefits of loaning their crypto on platforms like ETHLend, Dharma, and Compound at rates between 6–11% annual interest. To loan crypto and accrue interest, the process is roughly the same as borrowing – just lock it into a wallet on the platform of your choice.
The emergence of cryptocurrency lending also means that there is less incentive for selling crypto to fiat. Doing so is not only a taxable event, but it also means you’ll miss out on potential future gains. Instead of selling, cryptocurrency investors now have the option of leveraging their holdings.
Doing so not only keeps investors in the game but also holds value where it belongs – on the blockchain.
BTC is currently trading at just a touch above $10,053. It fell abruptly to this level after a swift rejection during its pursuit of $11K zone. That attempt, though promising, was done on unconvincing volume.
Even now, volume remains shallow, signaling disinterest around current prices. However, despite this interruption of BTC’s march toward the moon, like Agent Mulder in the X-Files, we want to believe.
Bitcoin’s narrative, which has been lacking in recent weeks, is beginning to regain strength as Bakkt comes into the frame along with an ETF decision looming on the horizon. Bakkt’s physically-settled bitcoin futures are due to go live on September 23, and shortly after, on October 19, is the SEC’s final deadline for ruling on the VanEck/SolidX Bitcoin ETF.
Of the various proposals delivered to the SEC, the VanEck/SolidX ETF is roundly believed to have the best odds for approval. Market sentiment needs a narrative. Without an objective on the horizon, even if it’s a source of insecurity (such as the ETF, which hinges on a yes or no answer), sentiment falls away along with interest.
To see how much interest has waned since BTC fell away from its parabolic advance, check the Google Trend chart at the bottom of this post.
However, Bitcoin values may stabilize in time based on an often-overlooked aspect of the cryptocurrency financial ecosystem: cryptocurrency loans.
Crypto Loan Industry Hitting All-Time Highs
Crypto-collateralized loans are going from peak to peak as they lock-in value in the crypto-financial ecosystem. Graychain, the world’s first crypto credit bureau, recently released a report detailing the estimated $5 billion crypto loans that have gone out to borrowers up to now.
The way crypto collateralized loans work is simple. Say you want to take out a loan – you choose a lender like Celsius, Nexo, Unchained, or the various other companies available, then deposit your crypto on the platform. You’ll need to deposit crypto worth roughly 2x the loan amount (i.e., for a loan of $10,000 you’ll need to deposit $20,000 worth of collateral).
Part of the appeal behind crypto loans is that you don’t need to worry about credit or employment checks – the only thing that matters is that you’ve got the crypto to back the loan. Even if you don’t, there are some companies, like Salt Lending, who let you get away with riskier loan terms.
What all this means for the crypto ecosystem is that more and more people are locking in BTC, ETH, LTC, XRP, BCH, and other leading digital currencies for the duration of a loan term. Loan terms are commonly between 12 and 36 months.
It’s not only borrowers who are improving the HODL ratio of crypto. Lenders are enjoying the benefits of loaning their crypto on platforms like ETHLend, Dharma, and Compound at rates between 6–11% annual interest. To loan crypto and accrue interest, the process is roughly the same as borrowing – just lock it into a wallet on the platform of your choice.
The emergence of cryptocurrency lending also means that there is less incentive for selling crypto to fiat. Doing so is not only a taxable event, but it also means you’ll miss out on potential future gains. Instead of selling, cryptocurrency investors now have the option of leveraging their holdings.
Doing so not only keeps investors in the game but also holds value where it belongs – on the blockchain.
BTC Back in Business
Hope you all had a restful labor day! Nothing quite like a respite from the usual to hit the reset button and start the week fresh.
Speaking of fresh starts, BTC found renewed vigor as it unexpectedly jumped from $9,400 up to $10,700. The run-up from $9,600 was particularly vigorous. Ascending volume matched bitcoin’s rising price tag tit for tat before topping out in a stride.
The latest move confused anyone seeking logic behind it. However, it correspond very nicely with the news that VanEck SolidX is offering a limited bitcoin ETF to institutional investors.
In the short term we have:
• VanEck’s unexpected ETF offering
• Bakkt’s bitcoin futures live date on the 23rd
• Final ETF decision arriving mid-October
The takeaway is that we’re entering a precarious time rife with potential for extreme volatility. Remember, volatility is not just to the downside, but to the upside as well.
The possibility of reaching for the $11K-$11.5K region is crystallizing more with every daily close spent above $10.2K. Bitcoin’s obvious strength over the past couple of days tells us that with only an additional bit of fuel thrown in the fire, we may find ourselves firmly breaking out of the descending triangle in the chart below.
A move up towards $11K may be nothing more than a fake out attempt at breaking from the descending triangle, but banking on that by being short now is more risk than we’re willing to stomach.
After all of these weeks spent sideways and slipping lower, it would be a real shame to watch from the sidelines as BTC retests yearly highs around $14K.
We’re monitoring the situation closely and will keep you up to date.
Hope you all had a restful labor day! Nothing quite like a respite from the usual to hit the reset button and start the week fresh.
Speaking of fresh starts, BTC found renewed vigor as it unexpectedly jumped from $9,400 up to $10,700. The run-up from $9,600 was particularly vigorous. Ascending volume matched bitcoin’s rising price tag tit for tat before topping out in a stride.
The latest move confused anyone seeking logic behind it. However, it correspond very nicely with the news that VanEck SolidX is offering a limited bitcoin ETF to institutional investors.
In the short term we have:
• VanEck’s unexpected ETF offering
• Bakkt’s bitcoin futures live date on the 23rd
• Final ETF decision arriving mid-October
The takeaway is that we’re entering a precarious time rife with potential for extreme volatility. Remember, volatility is not just to the downside, but to the upside as well.
The possibility of reaching for the $11K-$11.5K region is crystallizing more with every daily close spent above $10.2K. Bitcoin’s obvious strength over the past couple of days tells us that with only an additional bit of fuel thrown in the fire, we may find ourselves firmly breaking out of the descending triangle in the chart below.
A move up towards $11K may be nothing more than a fake out attempt at breaking from the descending triangle, but banking on that by being short now is more risk than we’re willing to stomach.
After all of these weeks spent sideways and slipping lower, it would be a real shame to watch from the sidelines as BTC retests yearly highs around $14K.
We’re monitoring the situation closely and will keep you up to date.
Asia Wakes Up, Puts Crypto Down
Bitcoin had already been gently losing altitude the last few days. Today, however, Asia collectively woke up and shot the Bitcoin plane down. A rapid downward spiral ensued, and now here we are, testing the $10K support yet again.
Tanking almost $400 in the process, BTC looks weak as its most recent run-up appears to have been unmasked as a pretender. There were plenty of giveaways, of course, including the anemic trading volume that was completely insufficient for propping up a substantive move.
However, no one wants to see a move down, at least not like this.
Given the sheer amount of fundamental developments on the horizon for BTC, there are a couple of immediately apparent scenarios:
1. Any move down from here to the Sept. 23 Bakkt Futures product launch is a buying opportunity.
2. Bakkt is priced in (and has been for a long time), in which case a move down can be sustained with occasional fake-out pumps to trap buyers.
Either of these scenarios is likely but are by no means exhaustive of what the short term future may hold.
Altcoins showing surprising resilience
It’s no secret that altcoins have been taking a crazy beating as of late. Just when you thought the bottom was in, they vaporize all previous support and head lower.
Maybe that goes some way in explaining why, right now, altcoins are showing a decent amount of strength relative to BTC.
Realistically, how much lower can they go? The truth is, there’s simply no telling where this pit of despair ends. In a way, that is up to the developers behind altcoin projects. Broken promises, endless delays, and the faint sting of countless scams continue to haunt the industry.
Nonetheless, development is happening – we just need to be patient. As the king of altcoins, Ethereum is the perfect marker for observing the relative health of the altcoin market as a whole.
After looking primed to head for the .014 range, ETHBTC has been experiencing something of a rally since the .0161 low a few days back. It’s too soon to tell whether this is steam gathering or just another relief rally.
But, considering BTC’s current moves, we should have our answer soon enough.
Bitcoin had already been gently losing altitude the last few days. Today, however, Asia collectively woke up and shot the Bitcoin plane down. A rapid downward spiral ensued, and now here we are, testing the $10K support yet again.
Tanking almost $400 in the process, BTC looks weak as its most recent run-up appears to have been unmasked as a pretender. There were plenty of giveaways, of course, including the anemic trading volume that was completely insufficient for propping up a substantive move.
However, no one wants to see a move down, at least not like this.
Given the sheer amount of fundamental developments on the horizon for BTC, there are a couple of immediately apparent scenarios:
1. Any move down from here to the Sept. 23 Bakkt Futures product launch is a buying opportunity.
2. Bakkt is priced in (and has been for a long time), in which case a move down can be sustained with occasional fake-out pumps to trap buyers.
Either of these scenarios is likely but are by no means exhaustive of what the short term future may hold.
Altcoins showing surprising resilience
It’s no secret that altcoins have been taking a crazy beating as of late. Just when you thought the bottom was in, they vaporize all previous support and head lower.
Maybe that goes some way in explaining why, right now, altcoins are showing a decent amount of strength relative to BTC.
Realistically, how much lower can they go? The truth is, there’s simply no telling where this pit of despair ends. In a way, that is up to the developers behind altcoin projects. Broken promises, endless delays, and the faint sting of countless scams continue to haunt the industry.
Nonetheless, development is happening – we just need to be patient. As the king of altcoins, Ethereum is the perfect marker for observing the relative health of the altcoin market as a whole.
After looking primed to head for the .014 range, ETHBTC has been experiencing something of a rally since the .0161 low a few days back. It’s too soon to tell whether this is steam gathering or just another relief rally.
But, considering BTC’s current moves, we should have our answer soon enough.
The Chop Don’t Stop
Bitcoin, along with the rest of the cryptocurrency market, is currently amidst an unmitigated period of indecision. A contradiction of solid pumpamentals and a shaken retail trading crowd has led to a stalemate of frustrating proportions.
Then again, you can’t really complain about $10K BTC. Especially when global buyers have repeatedly stood their ground to say this is what one bitcoin is worth. As crypto traders, we’re used to two market modes:
1. Mooning
2. Dumping
Is there room for anything in between? As a demographic of traders, “cryptomaniacs” (as famed technical analyst Peter Brandt calls us) probably have no idea how to handle periods of indecision.
Shouldn’t we be celebrating these moments of comparatively low volatility? Is this not bitcoin’s store-of-value argument in proof and deed? Of course, if SoV is true for bitcoin, then its day-to-day moves will be more incremental.
That doesn’t mean BTC can’t/won’t achieve the stratospheric values we hope for, but it might not get there as quickly or decisively as everyone wants.
Tuesday’s drop and retest of the $10K marker happened on low volume that failed to challenge support in that area substantively. Like a $185 billion yo-yo, BTC has taken off in the opposite direction by a similar dollar amount, adding around $350 back on in the process.
Binance driving indecision?
At $10,332, bitcoin’s indecision may be directly tied in with the fear surrounding Binance’s structural reorganization. That’s a nice way of saying that Binance is on the brink of axing American customers from its global service.
With some estimates claiming Americans make up 30% of global crypto trading volume, shunning a financial powerhouse from the majority of assets available on Binance might be a bad thing. There’s really no telling, which also means that crypto’s pseudonymity is an effective privacy safeguard.
That hasn’t stopped a few prominent digital assets from performing strongly in recent days. ATOM, KCS, and even ICX have shown themselves as winners in the short term, but whether they’ll go the distance is another matter.
Some altcoin moves are based on fundamental developments. ICON, for instance, went live with staking this month, while KuCoin announced a second anniversary BTC sale which requires KCS for participation.
Binance’s move away from US customers is rife with unresolved questions surrounding execution. For instance, how will Binance know who is American and not? Using IP detection will unfairly exclude US-based non-American traders.
These questions don’t appear to be slowing the Binance.US rollout. Just a few hours ago, Binance.US tweeted that onboarding forAmerican clients is now underway.
They also used the hashtag #ThisIsJustTheBeginning when addressing the variety of digital assets available on the exchange.
As always, anything Binance does is worth paying close attention to, even if your non-American Binance account is #SAFU.
Bitcoin, along with the rest of the cryptocurrency market, is currently amidst an unmitigated period of indecision. A contradiction of solid pumpamentals and a shaken retail trading crowd has led to a stalemate of frustrating proportions.
Then again, you can’t really complain about $10K BTC. Especially when global buyers have repeatedly stood their ground to say this is what one bitcoin is worth. As crypto traders, we’re used to two market modes:
1. Mooning
2. Dumping
Is there room for anything in between? As a demographic of traders, “cryptomaniacs” (as famed technical analyst Peter Brandt calls us) probably have no idea how to handle periods of indecision.
Shouldn’t we be celebrating these moments of comparatively low volatility? Is this not bitcoin’s store-of-value argument in proof and deed? Of course, if SoV is true for bitcoin, then its day-to-day moves will be more incremental.
That doesn’t mean BTC can’t/won’t achieve the stratospheric values we hope for, but it might not get there as quickly or decisively as everyone wants.
Tuesday’s drop and retest of the $10K marker happened on low volume that failed to challenge support in that area substantively. Like a $185 billion yo-yo, BTC has taken off in the opposite direction by a similar dollar amount, adding around $350 back on in the process.
Binance driving indecision?
At $10,332, bitcoin’s indecision may be directly tied in with the fear surrounding Binance’s structural reorganization. That’s a nice way of saying that Binance is on the brink of axing American customers from its global service.
With some estimates claiming Americans make up 30% of global crypto trading volume, shunning a financial powerhouse from the majority of assets available on Binance might be a bad thing. There’s really no telling, which also means that crypto’s pseudonymity is an effective privacy safeguard.
That hasn’t stopped a few prominent digital assets from performing strongly in recent days. ATOM, KCS, and even ICX have shown themselves as winners in the short term, but whether they’ll go the distance is another matter.
Some altcoin moves are based on fundamental developments. ICON, for instance, went live with staking this month, while KuCoin announced a second anniversary BTC sale which requires KCS for participation.
Binance’s move away from US customers is rife with unresolved questions surrounding execution. For instance, how will Binance know who is American and not? Using IP detection will unfairly exclude US-based non-American traders.
These questions don’t appear to be slowing the Binance.US rollout. Just a few hours ago, Binance.US tweeted that onboarding forAmerican clients is now underway.
They also used the hashtag #ThisIsJustTheBeginning when addressing the variety of digital assets available on the exchange.
As always, anything Binance does is worth paying close attention to, even if your non-American Binance account is #SAFU.
Ethereum Showing Signs of Life
For the first time in forever, Ethereum has shown signs of life, reminding many of us that it’s still here. Despite going dark for nearly 1.5 years, the world’s number two digital asset is picking back up on a stride it lost long ago.
Let’s pull back the curtain and take a look at why Ethereum appears to be back in favor, and what that might mean for its mid-term prospects.
Tether (USDT) is tying up Ethereum, but that’s a good thing
At the beginning of the year, Tether’s handlers declared they would be moving USDT from Omni to the Ethereum blockchain. Tether does upwards of $15 billion in daily transaction volume, and is itself worth $4.1 billion (hopefully) cash-backed USDTs.
Suffice to say that is a ton of network strain heading straight for the Ethereum blockchain. As the year progressed, Ethereum gradually started showing signs which belied that strain. This month, transaction wait times have resembled those of the Crypto Kitties days, with some users waiting days for transactions to finally confirm.
The huge boost in network activity caused by millions of Tether transactions has led to near ATH gas fees. In response, Ethereum miners have moved toward increasing the gas limit, which would create more transaction throughput.
It’s easy to point out that Ethereum is struggling to meet the demands of Tether’s move, but that doesn’t tell the whole story. In our view, we’re witnessing the beginning of Ethereum-based decentralized finance (DeFi), a much touted but hitherto unseen network potential.
With real value moving onto the network in a permanent way, the emergence of demand for the Ethereum world computer comes as a relief. While other smart contract platforms have thrown their hats in the ring, it’s probable that high-stakes products like USDT will continue to choose a tried and true platform like Ethereum.
Ethereum 2.0 on track
On June 13, developers reiterated their belief that Ethereum 2.0 is on track for a January 3, 2020 rollout.
As outlined in our recent analysis, ETH 2.0 will appear in several phases. Phase zero, which comes as the first most important implementation, will feature the launch of the proof of stake beacon chain.
A switch to proof of stake will also mean lower gas fees and high transaction throughput, which should go some ways in ameliorating the aforementioned USDT situation.
Additionally, Binance recently published a report showing Ethereum’s sheer dominance when it comes to hosting decentralized finance applications. EOS and BTC, the next closest competitors, have a lot of catching up to do. Ethereum outdoes them by hosting over 15x the amount of DeFi apps.
From a network usage perspective, that’s a bullish sign for the future because DeFi apps use more complicated-than-usual smart contracts which, in turn, require more gas.
Resources for watching Ethereum
The beautiful thing about blockchain is that network metrics are always available for you to see if you know where to look. Here are a few very handy resources for observing network usage, gas fees, network utilization, and more:
• https://etherscan.io/chart/networkutilization
• https://etherscan.io/chart/tx
• https://etherscan.io/chart/transactionfee
• https://ethgasstation.info/index.php
• https://studio.glassnode.com/metrics?a=ETH&m=indicators.Sopr
For the first time in forever, Ethereum has shown signs of life, reminding many of us that it’s still here. Despite going dark for nearly 1.5 years, the world’s number two digital asset is picking back up on a stride it lost long ago.
Let’s pull back the curtain and take a look at why Ethereum appears to be back in favor, and what that might mean for its mid-term prospects.
Tether (USDT) is tying up Ethereum, but that’s a good thing
At the beginning of the year, Tether’s handlers declared they would be moving USDT from Omni to the Ethereum blockchain. Tether does upwards of $15 billion in daily transaction volume, and is itself worth $4.1 billion (hopefully) cash-backed USDTs.
Suffice to say that is a ton of network strain heading straight for the Ethereum blockchain. As the year progressed, Ethereum gradually started showing signs which belied that strain. This month, transaction wait times have resembled those of the Crypto Kitties days, with some users waiting days for transactions to finally confirm.
The huge boost in network activity caused by millions of Tether transactions has led to near ATH gas fees. In response, Ethereum miners have moved toward increasing the gas limit, which would create more transaction throughput.
It’s easy to point out that Ethereum is struggling to meet the demands of Tether’s move, but that doesn’t tell the whole story. In our view, we’re witnessing the beginning of Ethereum-based decentralized finance (DeFi), a much touted but hitherto unseen network potential.
With real value moving onto the network in a permanent way, the emergence of demand for the Ethereum world computer comes as a relief. While other smart contract platforms have thrown their hats in the ring, it’s probable that high-stakes products like USDT will continue to choose a tried and true platform like Ethereum.
Ethereum 2.0 on track
On June 13, developers reiterated their belief that Ethereum 2.0 is on track for a January 3, 2020 rollout.
As outlined in our recent analysis, ETH 2.0 will appear in several phases. Phase zero, which comes as the first most important implementation, will feature the launch of the proof of stake beacon chain.
A switch to proof of stake will also mean lower gas fees and high transaction throughput, which should go some ways in ameliorating the aforementioned USDT situation.
Additionally, Binance recently published a report showing Ethereum’s sheer dominance when it comes to hosting decentralized finance applications. EOS and BTC, the next closest competitors, have a lot of catching up to do. Ethereum outdoes them by hosting over 15x the amount of DeFi apps.
From a network usage perspective, that’s a bullish sign for the future because DeFi apps use more complicated-than-usual smart contracts which, in turn, require more gas.
Resources for watching Ethereum
The beautiful thing about blockchain is that network metrics are always available for you to see if you know where to look. Here are a few very handy resources for observing network usage, gas fees, network utilization, and more:
• https://etherscan.io/chart/networkutilization
• https://etherscan.io/chart/tx
• https://etherscan.io/chart/transactionfee
• https://ethgasstation.info/index.php
• https://studio.glassnode.com/metrics?a=ETH&m=indicators.Sopr
Ethereum (ETH) Blockchain Explorer
Ethereum Network Utilization Chart | Etherscan
The Ethereum Network Utilization Chart shows the average gas used over the gas limit in percentage.
Which Way Is Up?
Kind of a crazy week in crypto world, right? What’s the altcoin trading cheat sheet say? Something like:
1. Bitcoin goes up, altcoins dump
2. Bitcoin goes down, altcoins dump
3. Bitcoin stays flat, altcoins pump
This week seemed to give that meme a bit of merit – that is, until the past couple of days. Since then, alts have been in a bit of a consolidation phase. However, with Ethereum still looking primed for a move up into the $235 region, we’re looking to the rest of the market to jump up again as well.
ETH kicked this move off from $188 and topped out at just under $225. The whole thing took just under five days. During that time, a downward taper paired with a sharp move up perfectly showcased keen buyer interest showing up for the world’s number two digital asset.
Since then, ETH bulls haven’t let prices slink much lower, despite the relative weakness of BTC since the VanEck SolidX ETF withdrawal.
Nonetheless, we’ve positioned ourselves to profit should ETH do another leg up – something which, from our view, could happen.
Asia-Based Crypto Exchanges Delisting Privacy Coins
In a concern-inducing move, Upbit, a top-drawer South Korean crypto exchange, pulled any and all digital assets with privacy features. Dash, Monero, Zcash, and smaller coins like Haven all had their Upbit privileges revoked.
The move mirrors a similar one made by OKEx which, in its turn, had followed Coinbase UK’s lead when it delisted Zcash. Privacy coin owners and supporters are understandably upset by the growing trend amongst regulated exchanges to delist anonymity-supporting assets.
At the crux of the issue are regulators who believe such tokens are antithetical to KYC and AML laws. That’s the public reason, anyway. We should know that governments also just don’t want to be left in the dark when it comes to who owns what.
Going forward, regulators want to devise a way to track and trace every transaction back to an identifiable owner. Monero doesn’t let them do that, so any exchange hoping to stay on the right side of regulators will have to give it the ax. Sad but true.
We’ll keep you updated as this timely issue evolves.
Kind of a crazy week in crypto world, right? What’s the altcoin trading cheat sheet say? Something like:
1. Bitcoin goes up, altcoins dump
2. Bitcoin goes down, altcoins dump
3. Bitcoin stays flat, altcoins pump
This week seemed to give that meme a bit of merit – that is, until the past couple of days. Since then, alts have been in a bit of a consolidation phase. However, with Ethereum still looking primed for a move up into the $235 region, we’re looking to the rest of the market to jump up again as well.
ETH kicked this move off from $188 and topped out at just under $225. The whole thing took just under five days. During that time, a downward taper paired with a sharp move up perfectly showcased keen buyer interest showing up for the world’s number two digital asset.
Since then, ETH bulls haven’t let prices slink much lower, despite the relative weakness of BTC since the VanEck SolidX ETF withdrawal.
Nonetheless, we’ve positioned ourselves to profit should ETH do another leg up – something which, from our view, could happen.
Asia-Based Crypto Exchanges Delisting Privacy Coins
In a concern-inducing move, Upbit, a top-drawer South Korean crypto exchange, pulled any and all digital assets with privacy features. Dash, Monero, Zcash, and smaller coins like Haven all had their Upbit privileges revoked.
The move mirrors a similar one made by OKEx which, in its turn, had followed Coinbase UK’s lead when it delisted Zcash. Privacy coin owners and supporters are understandably upset by the growing trend amongst regulated exchanges to delist anonymity-supporting assets.
At the crux of the issue are regulators who believe such tokens are antithetical to KYC and AML laws. That’s the public reason, anyway. We should know that governments also just don’t want to be left in the dark when it comes to who owns what.
Going forward, regulators want to devise a way to track and trace every transaction back to an identifiable owner. Monero doesn’t let them do that, so any exchange hoping to stay on the right side of regulators will have to give it the ax. Sad but true.
We’ll keep you updated as this timely issue evolves.
Bitcoin Breaks Down
After weeks of indecision and what appeared to be a strong argument for $10K BTC, bear pressure finally broke through the lines and took Bitcoin down hard.
The carnage on the charts wasn’t limited to BTC, however, as all the majors (ETH, XRP, EOS, XLM) took hits in the double-digits. The surprising and impossible to predict turn of events led to the crypto market looking more like a smoldering crater than an asset class with a bright future.
Currently, BTC is trading hands a shade over $8.1k while a select few majors, like XRP and ETH, appear poised to recover some of their losses.
Bitcoin shed nearly $2,000 in value before the market had time to blink, leading market observers to seek answers.
A flash crash of this magnitude hasn’t been seen in months. Given the relative stability of crypto’s leading digital asset across recent weeks, suspecting the involvement of concomitant factors is certainly warranted.
While this week’s losses appear insufferable, they’re only the third-worst of the year. What we’re implying here is that on two other occasions in 2019, Bitcoin has taken a massive beating and recovered.
Let’s take a look at what contributed to the market wreck this week.
Bakkt Flops
There are a million ways to spin the Bakkt debut, but here is the reality. Bakkt flopped. Perhaps belly-flopped is more accurate here. What was a hotly anticipated date – Bakkt’s physically settled BTC futures debut – turned into a dud.
It was kind of like finally lighting your favorite firework, watching the flame move down the fuse with indescribable excitement, then feeling speechless disappointment when the firework fails to go off.
In its first 24-hours, Bakkt settled a mere 78 BTC futures which, ironically, settled October 2019 futures at below $10K.
The immediate market takeaway from the hollow debut wasn’t too difficult to guess – big financial institutions aren’t all that interest in BTC.
Or are they?
We’re more inclined to think that the situation is a more simple than it seems. Institutions who are ready in the here and now to buy BTC can already do so using OTC exchanges. At this early stage in the crypto game, an institution willing to buy now is already adventurous and probably doesn’t need the Bakkt onramp.
We’re not saying Bakkt is pointless, though. What the flop debut reveals is that even though mainstream institutions aren’t breaking down Bakkt’s door yet, they might do so down the line when BTC adoption and consciousness finds real legs.
As a piece of infrastructure, Bakkt is incredibly important for crypto.
The only thing is, it might be slightly ahead of its time.
BTC Hash Rate Crash
This is a quickly developing story that is still sans deep details, but here’s what we know.
On September 23, the Bitcoin network hash rate plummeted 40% in what was one of the largest intraday hash rate drops in network history.
The reasons behind the strange crash are still shrouded in mystery.
A high hash rate means miner competition to validate blocks is healthy, which in turn makes the network more competitive and, thus, secure. An increasing hash rate is viewed as bullish, while the opposite is viewed as, well, bearish.
Some have speculated that the hash rate crash was caused by a firmware upgrade to account for the network’s incoming difficulty increase. Jeff Brandt, a user posting to CoinTelegraph’s comments section, described his view of the situation:
“The explanation is simple. The next diff increase in 2 days will push previous gen S9’s (roughly 50% of the network) below profitability.
Last week an unrestricted firmware for S9’s was posted and every large farm operator is working at a feverish pace to get approximately 3 million machines updated.
The new firmware has optimizations that squeeze the very last bit of efficiency out of the S9 lowering the watts/thash-sec from 96W to ~80W.
After weeks of indecision and what appeared to be a strong argument for $10K BTC, bear pressure finally broke through the lines and took Bitcoin down hard.
The carnage on the charts wasn’t limited to BTC, however, as all the majors (ETH, XRP, EOS, XLM) took hits in the double-digits. The surprising and impossible to predict turn of events led to the crypto market looking more like a smoldering crater than an asset class with a bright future.
Currently, BTC is trading hands a shade over $8.1k while a select few majors, like XRP and ETH, appear poised to recover some of their losses.
Bitcoin shed nearly $2,000 in value before the market had time to blink, leading market observers to seek answers.
A flash crash of this magnitude hasn’t been seen in months. Given the relative stability of crypto’s leading digital asset across recent weeks, suspecting the involvement of concomitant factors is certainly warranted.
While this week’s losses appear insufferable, they’re only the third-worst of the year. What we’re implying here is that on two other occasions in 2019, Bitcoin has taken a massive beating and recovered.
Let’s take a look at what contributed to the market wreck this week.
Bakkt Flops
There are a million ways to spin the Bakkt debut, but here is the reality. Bakkt flopped. Perhaps belly-flopped is more accurate here. What was a hotly anticipated date – Bakkt’s physically settled BTC futures debut – turned into a dud.
It was kind of like finally lighting your favorite firework, watching the flame move down the fuse with indescribable excitement, then feeling speechless disappointment when the firework fails to go off.
In its first 24-hours, Bakkt settled a mere 78 BTC futures which, ironically, settled October 2019 futures at below $10K.
The immediate market takeaway from the hollow debut wasn’t too difficult to guess – big financial institutions aren’t all that interest in BTC.
Or are they?
We’re more inclined to think that the situation is a more simple than it seems. Institutions who are ready in the here and now to buy BTC can already do so using OTC exchanges. At this early stage in the crypto game, an institution willing to buy now is already adventurous and probably doesn’t need the Bakkt onramp.
We’re not saying Bakkt is pointless, though. What the flop debut reveals is that even though mainstream institutions aren’t breaking down Bakkt’s door yet, they might do so down the line when BTC adoption and consciousness finds real legs.
As a piece of infrastructure, Bakkt is incredibly important for crypto.
The only thing is, it might be slightly ahead of its time.
BTC Hash Rate Crash
This is a quickly developing story that is still sans deep details, but here’s what we know.
On September 23, the Bitcoin network hash rate plummeted 40% in what was one of the largest intraday hash rate drops in network history.
The reasons behind the strange crash are still shrouded in mystery.
A high hash rate means miner competition to validate blocks is healthy, which in turn makes the network more competitive and, thus, secure. An increasing hash rate is viewed as bullish, while the opposite is viewed as, well, bearish.
Some have speculated that the hash rate crash was caused by a firmware upgrade to account for the network’s incoming difficulty increase. Jeff Brandt, a user posting to CoinTelegraph’s comments section, described his view of the situation:
“The explanation is simple. The next diff increase in 2 days will push previous gen S9’s (roughly 50% of the network) below profitability.
Last week an unrestricted firmware for S9’s was posted and every large farm operator is working at a feverish pace to get approximately 3 million machines updated.
The new firmware has optimizations that squeeze the very last bit of efficiency out of the S9 lowering the watts/thash-sec from 96W to ~80W.
Some machines can perform with no degradation to speed, while older machines must drop performance by ~30% to achieve the same results.”
The Takeaway
Three significant factors colluded to cloud the cryptocurrency market with a gloomy outlook.
VanEck SolidX’s ETF withdrawal, a sudden hash rate crash, and Bakkt’s weak debut happened in nearly perfect unison, giving a sideways BTC the motives needed to break down.
At this point, we’re watching and waiting for the carnage to slow before freshly assessing the charts.
The Takeaway
Three significant factors colluded to cloud the cryptocurrency market with a gloomy outlook.
VanEck SolidX’s ETF withdrawal, a sudden hash rate crash, and Bakkt’s weak debut happened in nearly perfect unison, giving a sideways BTC the motives needed to break down.
At this point, we’re watching and waiting for the carnage to slow before freshly assessing the charts.
Cryptocurrency Market Stalls As Horizon Fades
The cryptocurrency market appears to have stalled out in the wake of several fundamentals that failed to deliver. Bakkt’s weak BTC futures debut and the withdrawal of VanEck SolidX’s ETF proposal both adversely affected the market, and today’s slump is a direct result.
Investors and traders look to impending fundamental factors as price drivers. In their absence, traders only have charts upon which to rely, and it goes without saying that BTC’s chart hasn’t painted the prettiest picture in recent weeks.
Additionally, the BTC hash rate flash crash didn’t do anything to assuage investor concerns that the Bitcoin network is both secure and stable. At the time of writing, BTC appears to have stabilized (for the moment) above $8,200.
Without any fundamental price drivers in the immediate horizon, the next milestone to look to is the May 2020 halving. Currently, it appears that all of Crypto Twitter is expected a drop to the $6K range, if not lower. While there is, without a doubt, every possibility a sizable decline will occur, we’re not entirely sold.
The BTC halving is approaching, and quickly. Getting in position to take advantage of the presumed price run leading to BTC’s quadrennial event will be the modus operandi of every intelligent trader in the market.
Given that, we won’t be surprised to see BTC find a price floor above the catastrophic lows being predicted.
Will quantum computing break crypto?
A requisite ability in any cryptocurrency investor’s skillset is that of reading seemingly disconnected events for the ways they may be relevant now, or in the future. Case in point – today, Google reached its “quantum supremacy” milestone, meaning the company’s rudimentary quantum computer outperformed a traditional one.
In a nutshell, quantum computers can easily run through impossibly sophisticated computations in the blink of an eye. Whereas a cluster of some of today’s best computers may take months, to complete a complex calculation, quantum computers will do them in seconds.
What has that got to do with crypto?
Bitcoin, Ethereum, and the rest are cryptographically encrypted digital assets. Their security is guaranteed by the difficult calculations required to append transactions to the blockchain (via mining). However, a quantum computer, in theory, can easily power through the calculations which cryptographically secure digital assets today. In essence, quantum computers can potentially break blockchains.
In response, blockchain architects are generally doing one of two things:
1. Researching and deploying quantum-resistant cryptography as quickly as possible.
2. Deploying quantum-based blockchains which play nice with their computer counterparts. This prospect has been thoroughly researched https://arxiv.org/pdf/1804.05979.pdf, but can’t be undertaken until quantum computing is established, stable, and well understood.
Concerns over how the rise of quantum computing may affect Bitcoin are well-founded but early. Google and IBM have both progressed much faster than anticipated, though their prototypes have a very long way to go before posing a threat to Bitcoin or blockchain generally.
Technologies also grow in tandem. As progress is made in the quantum computing arena, there will be trickle-down and cross pollination to other sectors – like blockchain.
Back in 2013, Ethereum founder Vitalik Buterin tried to get funding to build a quantum computer himself. More recently, he suggested quantum-resistant Lamport Signatures as a way to future proof blockchains. For additional reading on the subject, we suggest the following research paper noscriptd “Bitcoin and Quantum Computing” – https://arxiv.org/pdf/1711.04235.pdf.
The cryptocurrency market appears to have stalled out in the wake of several fundamentals that failed to deliver. Bakkt’s weak BTC futures debut and the withdrawal of VanEck SolidX’s ETF proposal both adversely affected the market, and today’s slump is a direct result.
Investors and traders look to impending fundamental factors as price drivers. In their absence, traders only have charts upon which to rely, and it goes without saying that BTC’s chart hasn’t painted the prettiest picture in recent weeks.
Additionally, the BTC hash rate flash crash didn’t do anything to assuage investor concerns that the Bitcoin network is both secure and stable. At the time of writing, BTC appears to have stabilized (for the moment) above $8,200.
Without any fundamental price drivers in the immediate horizon, the next milestone to look to is the May 2020 halving. Currently, it appears that all of Crypto Twitter is expected a drop to the $6K range, if not lower. While there is, without a doubt, every possibility a sizable decline will occur, we’re not entirely sold.
The BTC halving is approaching, and quickly. Getting in position to take advantage of the presumed price run leading to BTC’s quadrennial event will be the modus operandi of every intelligent trader in the market.
Given that, we won’t be surprised to see BTC find a price floor above the catastrophic lows being predicted.
Will quantum computing break crypto?
A requisite ability in any cryptocurrency investor’s skillset is that of reading seemingly disconnected events for the ways they may be relevant now, or in the future. Case in point – today, Google reached its “quantum supremacy” milestone, meaning the company’s rudimentary quantum computer outperformed a traditional one.
In a nutshell, quantum computers can easily run through impossibly sophisticated computations in the blink of an eye. Whereas a cluster of some of today’s best computers may take months, to complete a complex calculation, quantum computers will do them in seconds.
What has that got to do with crypto?
Bitcoin, Ethereum, and the rest are cryptographically encrypted digital assets. Their security is guaranteed by the difficult calculations required to append transactions to the blockchain (via mining). However, a quantum computer, in theory, can easily power through the calculations which cryptographically secure digital assets today. In essence, quantum computers can potentially break blockchains.
In response, blockchain architects are generally doing one of two things:
1. Researching and deploying quantum-resistant cryptography as quickly as possible.
2. Deploying quantum-based blockchains which play nice with their computer counterparts. This prospect has been thoroughly researched https://arxiv.org/pdf/1804.05979.pdf, but can’t be undertaken until quantum computing is established, stable, and well understood.
Concerns over how the rise of quantum computing may affect Bitcoin are well-founded but early. Google and IBM have both progressed much faster than anticipated, though their prototypes have a very long way to go before posing a threat to Bitcoin or blockchain generally.
Technologies also grow in tandem. As progress is made in the quantum computing arena, there will be trickle-down and cross pollination to other sectors – like blockchain.
Back in 2013, Ethereum founder Vitalik Buterin tried to get funding to build a quantum computer himself. More recently, he suggested quantum-resistant Lamport Signatures as a way to future proof blockchains. For additional reading on the subject, we suggest the following research paper noscriptd “Bitcoin and Quantum Computing” – https://arxiv.org/pdf/1711.04235.pdf.
BTC Market Update: Two Scenarios in Play
The sheer turbulence of the cryptocurrency market these days has sidelined all but the most adventurous traders. As far as rollercoasters go, this one has been pretty thrilling, a little scary, and entirely unpredictable.
An easy way to gauge just how few traders have a sense of direction in these tumultuous times is to read a Crypto Twitter feed. The more posts you see about meta-crypto topics, things Binance is doing, or dogs, the deeper in a bear cycle the market is.
That’s alright, though. We’ve said this before, and so have many others, but it’s always worth repeating: Markets move in cycles. In our humble opinion, the rocket is refueling. But, if you’re the one strapped in the rocket and waiting for launch, it’s easy to become impatient with the process you’re unable to see.
Rockets aside, BTC is currently cooling at $8,267 – a far cry from $10K. Crypto’s #1 is throwing mixed signals into the air. Both weekly and 2W timeframes displayed clear weakness by closing below HTF demand OB EQ at $8,259.80.
Additionally, there is an olympic-size pool of demand resting below us from $7,400 to $6,650. That roughly translates as traders not wanting to hop in this ambiguous $8K price zone that looks ready to break down. The logic is – BTC seems weak, it dropped like a rock from $10K, so, why buy here instead of lower?
We do, however, see a potential bearish retest of ~$8,890 in the cards and an area of interest to short. On the other hand, if we arrive at $8,890 and decisively sail past it without so much as a coffee break, then we’d look to buy on a retest and target ~$9,800.
To summarize, the situation is basically this: We aren’t doing anything here. Prices may break down again like they did last week. If they do, you’ll be happy you saved your ammo for the lows. Watch for a move toward $9K, and if it happens neatly on decisive volume and good vibes, then we’ll join the party.
The sheer turbulence of the cryptocurrency market these days has sidelined all but the most adventurous traders. As far as rollercoasters go, this one has been pretty thrilling, a little scary, and entirely unpredictable.
An easy way to gauge just how few traders have a sense of direction in these tumultuous times is to read a Crypto Twitter feed. The more posts you see about meta-crypto topics, things Binance is doing, or dogs, the deeper in a bear cycle the market is.
That’s alright, though. We’ve said this before, and so have many others, but it’s always worth repeating: Markets move in cycles. In our humble opinion, the rocket is refueling. But, if you’re the one strapped in the rocket and waiting for launch, it’s easy to become impatient with the process you’re unable to see.
Rockets aside, BTC is currently cooling at $8,267 – a far cry from $10K. Crypto’s #1 is throwing mixed signals into the air. Both weekly and 2W timeframes displayed clear weakness by closing below HTF demand OB EQ at $8,259.80.
Additionally, there is an olympic-size pool of demand resting below us from $7,400 to $6,650. That roughly translates as traders not wanting to hop in this ambiguous $8K price zone that looks ready to break down. The logic is – BTC seems weak, it dropped like a rock from $10K, so, why buy here instead of lower?
We do, however, see a potential bearish retest of ~$8,890 in the cards and an area of interest to short. On the other hand, if we arrive at $8,890 and decisively sail past it without so much as a coffee break, then we’d look to buy on a retest and target ~$9,800.
To summarize, the situation is basically this: We aren’t doing anything here. Prices may break down again like they did last week. If they do, you’ll be happy you saved your ammo for the lows. Watch for a move toward $9K, and if it happens neatly on decisive volume and good vibes, then we’ll join the party.
Is #DeFi Blockchain’s Killer dApp?
Over the years, talk about what blockchain’s best use case is has turned from gaming to cloud computing, and over toward more obscure possibilities.
As time goes by, however, it’s become apparent that money is what blockchain does best, especially when that money, and the way it’s invested, is decentralized. #DeFi, short for decentralized finance, has emerged as blockchain’s leading use case, but that should come as no surprise.
Examples of decentralized finance have abounded for years, but what has been missing all along was the short and sweet hashtag reference. Decentralized exchanges, projects like OmiseGo, and platforms such as Cardano all contribute to the overarching spread of #DeFi.
The significant difference now, as compared to a year or two ago, is that the #DeFi ecosystem is much more clearly defined. A large part of that definition results from the decentralized loan space being spearheaded by projects like Compound, MakerDAO, and Dharma.
Some centralized players are bringing light to the space too. Nexo, Genesis Capital, and Celsius Network are raking in big bucks doing the crypto lending thing, which, though not decentralized, locks more value into the crypto-financial ecosystem.
While crypto loans have been the linchpin of #DeFi up to now, we’re witnessing the broadening beginning of what feels like a true financial renaissance. Yesterday, MyCrypto.com reported a new milestone reached with 2.2 million ETH locked into the #DeFi space. At current ETH prices, that’s just shy of $400 million secured into decentralized lending and derivatives dApps.
Market Update
No big changes since our last report, with Bitcoin (along with other major blue chip assets) remaining range-bound.
After BTC/USD swept range highs a few days ago and gave the market a moment to dream, it’s now appearing weighed down and headed back for range lows based on the 4hr.
The good news is that alts vs. BTC seem to be enjoying the subtle swinging, as is evidenced by their slow climb against crypto’s leading asset. We’re leaving room in our short-term outlook for BTC to surprise us by moving bullishly, in which case we’d look to reduce our altcoin exposure.
Over the years, talk about what blockchain’s best use case is has turned from gaming to cloud computing, and over toward more obscure possibilities.
As time goes by, however, it’s become apparent that money is what blockchain does best, especially when that money, and the way it’s invested, is decentralized. #DeFi, short for decentralized finance, has emerged as blockchain’s leading use case, but that should come as no surprise.
Examples of decentralized finance have abounded for years, but what has been missing all along was the short and sweet hashtag reference. Decentralized exchanges, projects like OmiseGo, and platforms such as Cardano all contribute to the overarching spread of #DeFi.
The significant difference now, as compared to a year or two ago, is that the #DeFi ecosystem is much more clearly defined. A large part of that definition results from the decentralized loan space being spearheaded by projects like Compound, MakerDAO, and Dharma.
Some centralized players are bringing light to the space too. Nexo, Genesis Capital, and Celsius Network are raking in big bucks doing the crypto lending thing, which, though not decentralized, locks more value into the crypto-financial ecosystem.
While crypto loans have been the linchpin of #DeFi up to now, we’re witnessing the broadening beginning of what feels like a true financial renaissance. Yesterday, MyCrypto.com reported a new milestone reached with 2.2 million ETH locked into the #DeFi space. At current ETH prices, that’s just shy of $400 million secured into decentralized lending and derivatives dApps.
Market Update
No big changes since our last report, with Bitcoin (along with other major blue chip assets) remaining range-bound.
After BTC/USD swept range highs a few days ago and gave the market a moment to dream, it’s now appearing weighed down and headed back for range lows based on the 4hr.
The good news is that alts vs. BTC seem to be enjoying the subtle swinging, as is evidenced by their slow climb against crypto’s leading asset. We’re leaving room in our short-term outlook for BTC to surprise us by moving bullishly, in which case we’d look to reduce our altcoin exposure.
The Chinese Crypto Narrative
Hey Bravado Crew!
We know it’s been a little quiet around here, but that’s only appearances. Behind the scenes, we’ve got significant changes in the works that you’ll soon see reflected in Bravado’s offerings.
With that out of the way, let’s dive into the biggest news that’s fit to print in recent weeks – the Chinese crypto boom. A couple of weeks back, Chinese President Xi Jinping declared that blockchain is so vital to the next phase of Chinese economic growth that the country will embrace and implement it across several sectors.
That announcement was followed up yesterday by the Chinese Central Bank’s declaration that blockchain can solve many problems the country’s banking industry faces.
Jinping’s surprise statement gave bitcoin a 40%+ boost, the largest 24-hour surge seen since 2011. It was the definition of a face-melting run, and had us floored with disbelief.
Predictably enough, Chinese altcoins went on insane rallies of their own, with NEO, ONT, QTUM, and VeChain posting massive gains. Within 48 hours after Jinping’s statements, coins with even the slightest Chinese connection had seen a jump.
Where does that leave BTC now?
The Chinese crypto narrative has been amazing for crypto in the last two weeks. BTC rallied to back over $10K, despite it dumping back down into the high $8K region today.
That’s alright – remember, we were headed precipitously lower before Jinping stepped in, with many indicators pointing to the $6Ks. Instead, we broke back above the trend line and back into contention for a great end of year.
Tellingly, the boost given to BTC came in the form of a quadrupling in 24-hour volume. BTC volume nearly hit $50 billion – a clear ATH, and a sign that there is a crazy amount of money sitting sidelined, ready to pour into the market at the right moment.
Watch NEO and ONT
Yesterday, it became clear that BTC would need new impetus to continue the rally, but it appears that the China narrative is cooling off for now. Because we believe that narrative is providing the single biggest propulsion to the market (at current), we’re watching NEO and ONT as indicators of that narrative’s health.
With NEO and ONT pulling back from their monstrous rallies, we’ll probably need to wait for some additional interest from Chinese market participants, or a relaxing of crypto trading rules by Beijing.
Despite Jinping’s bullishness on blockchain, trading crypto is still banned in China, and the government explicitly warned against speculating on crypto investments.
Altszn?
Bitcoin’s sideways action and slight dumpiness have happened without a corresponding loss of altcoin gains made on the ratio. The relative stability of altcoins makes us slightly hopeful about what Q4 may bring us in terms of a sustained alt season – something we’ve waited for very patiently.
As such, we’re keeping an eye on ETHBTC as a leading indicator for the health of this potential, while also actively hunting setups.
Hey Bravado Crew!
We know it’s been a little quiet around here, but that’s only appearances. Behind the scenes, we’ve got significant changes in the works that you’ll soon see reflected in Bravado’s offerings.
With that out of the way, let’s dive into the biggest news that’s fit to print in recent weeks – the Chinese crypto boom. A couple of weeks back, Chinese President Xi Jinping declared that blockchain is so vital to the next phase of Chinese economic growth that the country will embrace and implement it across several sectors.
That announcement was followed up yesterday by the Chinese Central Bank’s declaration that blockchain can solve many problems the country’s banking industry faces.
Jinping’s surprise statement gave bitcoin a 40%+ boost, the largest 24-hour surge seen since 2011. It was the definition of a face-melting run, and had us floored with disbelief.
Predictably enough, Chinese altcoins went on insane rallies of their own, with NEO, ONT, QTUM, and VeChain posting massive gains. Within 48 hours after Jinping’s statements, coins with even the slightest Chinese connection had seen a jump.
Where does that leave BTC now?
The Chinese crypto narrative has been amazing for crypto in the last two weeks. BTC rallied to back over $10K, despite it dumping back down into the high $8K region today.
That’s alright – remember, we were headed precipitously lower before Jinping stepped in, with many indicators pointing to the $6Ks. Instead, we broke back above the trend line and back into contention for a great end of year.
Tellingly, the boost given to BTC came in the form of a quadrupling in 24-hour volume. BTC volume nearly hit $50 billion – a clear ATH, and a sign that there is a crazy amount of money sitting sidelined, ready to pour into the market at the right moment.
Watch NEO and ONT
Yesterday, it became clear that BTC would need new impetus to continue the rally, but it appears that the China narrative is cooling off for now. Because we believe that narrative is providing the single biggest propulsion to the market (at current), we’re watching NEO and ONT as indicators of that narrative’s health.
With NEO and ONT pulling back from their monstrous rallies, we’ll probably need to wait for some additional interest from Chinese market participants, or a relaxing of crypto trading rules by Beijing.
Despite Jinping’s bullishness on blockchain, trading crypto is still banned in China, and the government explicitly warned against speculating on crypto investments.
Altszn?
Bitcoin’s sideways action and slight dumpiness have happened without a corresponding loss of altcoin gains made on the ratio. The relative stability of altcoins makes us slightly hopeful about what Q4 may bring us in terms of a sustained alt season – something we’ve waited for very patiently.
As such, we’re keeping an eye on ETHBTC as a leading indicator for the health of this potential, while also actively hunting setups.
Is the China Narrative Running out of Steam?
In our last update, we covered the rapidly developing China narrative as that country’s president, Xi Jinping, favorably spoke about blockchain.
Since then, the market appears to have cooled. Jinping’s statements, which made clear that China is bullish on blockchain technology, didn’t mention any projects by name, nor did he speak about decentralization.
Despite that, coins with ties to China saw impressive gains. NEO, ONT, and QTUM were amongst those who experienced bull market-like increases, but have since tapered off.
Were Jinping’s statements nothing but a dream, or is there more where that came from?
China is likely kicking off a blockchain arms race
In an interview with Cointelegraph yesterday, Binance boss Changpeng Zhao said of China’s new stance toward blockchain:
It’s super positive. China’s very pro-technology, so China will invest very heavily in blockchain technology and on the educational front as well. Given that China has now made that move, every other country in the world will have no choice but to follow or move faster. But it’s going to be pretty hard to move faster than China to be honest.
In other words, when China decides to go for it, you’ll be hard-pressed to keep up. The United States and most members of the EU have expressed interest in blockchain technology, but have avoided taking key positions or signaling clear intent to adopt across industries.
Thus far, the private sector has explored blockchain with positive results, but no nation except China, Singapore, and to some extent, Russia has reflected that. However, due to China’s position as the world’s second greatest superpower, their sudden claim to what is likely the greatest incoming tech revolution since the internet is sure to pull others, like the USA, into the ring.
Digital yuan positioning itself as a global currency
Facebook’s Libra project was the first blockchain-based currency to be taken seriously as a global form of money. Owing to that, states around the world felt genuinely threatened by it and have largely blocked the project from advancing.
China, on the other hand, is a sovereign nation. To that end, it is free to pursue the creation of a digital currency for not only national purposes, but global ones as well.
In September, Circle’s Jeremy Allaire told CNBC that the digital yuan’s two-tier issuance system was a smart move for breaking the yuan out onto the world stage.
"This becomes a mechanism by which (the yuan) can be used in everyday transactions all around the world,” added Allaire, an internet entrepreneur who also founded video streaming firm Brightcove. “It’s ultimately a foundation for the internationalization” of the yuan.
Can the digital yuan challenge bitcoin for crypto supremacy? The PBOC, China’s central bank, already showed its hand in regard to how it views BTC when bitcoin trading in China was banned back in 2017. Clearly, government officials see bitcoin as a threat to financial policy, and would be more than happy to coax it into submission with the crypto yuan.
The takeaway
China’s foray into blockchain simply can’t be ignored, regardless of how quickly the market forgets essential news. While the outcome of these events may not be immediately bullish for the market as a whole, the stage is being set for a significant increase in awareness for blockchain technology.
In our last update, we covered the rapidly developing China narrative as that country’s president, Xi Jinping, favorably spoke about blockchain.
Since then, the market appears to have cooled. Jinping’s statements, which made clear that China is bullish on blockchain technology, didn’t mention any projects by name, nor did he speak about decentralization.
Despite that, coins with ties to China saw impressive gains. NEO, ONT, and QTUM were amongst those who experienced bull market-like increases, but have since tapered off.
Were Jinping’s statements nothing but a dream, or is there more where that came from?
China is likely kicking off a blockchain arms race
In an interview with Cointelegraph yesterday, Binance boss Changpeng Zhao said of China’s new stance toward blockchain:
It’s super positive. China’s very pro-technology, so China will invest very heavily in blockchain technology and on the educational front as well. Given that China has now made that move, every other country in the world will have no choice but to follow or move faster. But it’s going to be pretty hard to move faster than China to be honest.
In other words, when China decides to go for it, you’ll be hard-pressed to keep up. The United States and most members of the EU have expressed interest in blockchain technology, but have avoided taking key positions or signaling clear intent to adopt across industries.
Thus far, the private sector has explored blockchain with positive results, but no nation except China, Singapore, and to some extent, Russia has reflected that. However, due to China’s position as the world’s second greatest superpower, their sudden claim to what is likely the greatest incoming tech revolution since the internet is sure to pull others, like the USA, into the ring.
Digital yuan positioning itself as a global currency
Facebook’s Libra project was the first blockchain-based currency to be taken seriously as a global form of money. Owing to that, states around the world felt genuinely threatened by it and have largely blocked the project from advancing.
China, on the other hand, is a sovereign nation. To that end, it is free to pursue the creation of a digital currency for not only national purposes, but global ones as well.
In September, Circle’s Jeremy Allaire told CNBC that the digital yuan’s two-tier issuance system was a smart move for breaking the yuan out onto the world stage.
"This becomes a mechanism by which (the yuan) can be used in everyday transactions all around the world,” added Allaire, an internet entrepreneur who also founded video streaming firm Brightcove. “It’s ultimately a foundation for the internationalization” of the yuan.
Can the digital yuan challenge bitcoin for crypto supremacy? The PBOC, China’s central bank, already showed its hand in regard to how it views BTC when bitcoin trading in China was banned back in 2017. Clearly, government officials see bitcoin as a threat to financial policy, and would be more than happy to coax it into submission with the crypto yuan.
The takeaway
China’s foray into blockchain simply can’t be ignored, regardless of how quickly the market forgets essential news. While the outcome of these events may not be immediately bullish for the market as a whole, the stage is being set for a significant increase in awareness for blockchain technology.
Currently, BTC is hanging just above the $7,400 marker as the Asian markets get underway. Trading volume has been steadily decreasing across major trading pairs, including BTC/USD and ETH/BTC, signaling incoming decision time.
After BTC makes a significant movement (regardless of whether the move was up/down), it typically needs to hold momentum. Without doing so, history has shown us is that *down* is the way we go.
At current, BTC and the rest of the crypto market are fighting against a souring Chinese narrative being spun and promulgated by media outlets worldwide. Nevermind that China is bullish on blockchain, what the market is latching onto ever more tightly is the message that the world's most populous country is anti-crypto.
That wouldn't matter much if the rest of the world were up to the task of carrying the market, but so far, no one has stepped up to the plate.
So, what happens next?
$3 Billion Exit Scam Suppressing the Market?
Until CoinTelegraph broke the news about PlusToken, a $3 billion exit scam that mostly took place in Asia, few Westerners knew of the story.
To make a long story short, PlusToken, a purported crypto investment platform and wallet, scammed about $3 billion worth of BTC, ETH, and EOS from predominantly Chinese and South Korean investors.
Few inroads have been made regarding the whereabouts of PlusToken's founders after they disappeared in June of this year. A handful of blockchain analysis firms of vaguely concluded that vast sums of crypto from wallets associated with PlusToken may be suppressing market prices with shuffled digital assets.
Crypto Twitter Remains Largely Bullish, but Some Disagree
Bitcoin Jack, former lead analyst and current contributor here at Bravado, believes that the market is due for at least another leg down.
In a series of tweets between yesterday and today, Jack has outlined the case for a drop to the low $6,000s before finding a bottom sometime in January 2020.
A large drop to the $6K region will likely be preceded by a smaller step down to $7K flat, which is ominously looming just below the market's current standing.
Others, including famed trader Peter Brandt, see strength in BTC's current position, with Bloomberg's crypto outfit even speculating that short term prices may head above $8K.
As always, time will tell.
After BTC makes a significant movement (regardless of whether the move was up/down), it typically needs to hold momentum. Without doing so, history has shown us is that *down* is the way we go.
At current, BTC and the rest of the crypto market are fighting against a souring Chinese narrative being spun and promulgated by media outlets worldwide. Nevermind that China is bullish on blockchain, what the market is latching onto ever more tightly is the message that the world's most populous country is anti-crypto.
That wouldn't matter much if the rest of the world were up to the task of carrying the market, but so far, no one has stepped up to the plate.
So, what happens next?
$3 Billion Exit Scam Suppressing the Market?
Until CoinTelegraph broke the news about PlusToken, a $3 billion exit scam that mostly took place in Asia, few Westerners knew of the story.
To make a long story short, PlusToken, a purported crypto investment platform and wallet, scammed about $3 billion worth of BTC, ETH, and EOS from predominantly Chinese and South Korean investors.
Few inroads have been made regarding the whereabouts of PlusToken's founders after they disappeared in June of this year. A handful of blockchain analysis firms of vaguely concluded that vast sums of crypto from wallets associated with PlusToken may be suppressing market prices with shuffled digital assets.
Crypto Twitter Remains Largely Bullish, but Some Disagree
Bitcoin Jack, former lead analyst and current contributor here at Bravado, believes that the market is due for at least another leg down.
In a series of tweets between yesterday and today, Jack has outlined the case for a drop to the low $6,000s before finding a bottom sometime in January 2020.
A large drop to the $6K region will likely be preceded by a smaller step down to $7K flat, which is ominously looming just below the market's current standing.
Others, including famed trader Peter Brandt, see strength in BTC's current position, with Bloomberg's crypto outfit even speculating that short term prices may head above $8K.
As always, time will tell.
Bitcoin Price Lost and Found
Has this market not provided a wild ride the past few weeks? We’ve been everywhere except to the moon – however, if you were short, then you’d probably dispute that statement.
In fact, shorters have had a wonderful holiday season. BTC tumbled into the mid-$6K region, a place that many a traumatized crypto hodler hoped never to revisit again. And yet, we’ve not only gone there, but are hanging out just above support.
If you’re looking for some bright side to the situation, you don’t have to look very far. The all-important $6800 support has held – for now. Keep in mind that the last time support in that area broke down, we fell straight to $3,200.
As long as BTC can hold strong to this level, then we can start thinking about a trip back above water.
Bitcoin Dominance Creeping Higher
The cryptocurrency bear market has disproportionately affected altcoins. That is, of course, to be expected considering the second fiddle nature most play to Bitcoin.
That being said, BTC dominance up near the 70% mark is something rare enough in the past few years. Let’s be straight – altcoins are getting utterly rocked, manipulated, and discarded. For an Exhibit A display, look no further than the MATIC charts of late.
Altcoins are dangerously difficult to trade lately, which is pushing more and more money back into BTC or stablecoins. It’s an unsurprising trend pointing straight at the fear currently possessing the market.
B…b…But, What About the Halving?
Isn’t the halving supposed to make all BTC hodlers rich? Wasn’t the ride up to the moon supposed to have started by now? …What gives?
We hear you – and, to be quite honest, we’re not sure what gives, either. However, compared to past halvings, the stakes at this stage in the crypto game are WAY higher than ever before. The sheer amount of deep pockets in the market nowadays, along with the king-making rewards to be gained from playing the next halving right, make the approach less straightforward than ever before.
With that in mind, you can count on the games to continue well into
Q1. The question on everyone’s mind in this dangerously close standoff is: How low will bears push before flipping the switch? Bulls and bears are two sides of the same coin. Bears who are pushing for the lowest possible price today will simply step over the line and go long tomorrow once they’re satisfied.
To that end, resist dogmas, narratives, and stay flexible. In times like these, your best defense is an open mind, a patient outlook, and slow movements.
Has this market not provided a wild ride the past few weeks? We’ve been everywhere except to the moon – however, if you were short, then you’d probably dispute that statement.
In fact, shorters have had a wonderful holiday season. BTC tumbled into the mid-$6K region, a place that many a traumatized crypto hodler hoped never to revisit again. And yet, we’ve not only gone there, but are hanging out just above support.
If you’re looking for some bright side to the situation, you don’t have to look very far. The all-important $6800 support has held – for now. Keep in mind that the last time support in that area broke down, we fell straight to $3,200.
As long as BTC can hold strong to this level, then we can start thinking about a trip back above water.
Bitcoin Dominance Creeping Higher
The cryptocurrency bear market has disproportionately affected altcoins. That is, of course, to be expected considering the second fiddle nature most play to Bitcoin.
That being said, BTC dominance up near the 70% mark is something rare enough in the past few years. Let’s be straight – altcoins are getting utterly rocked, manipulated, and discarded. For an Exhibit A display, look no further than the MATIC charts of late.
Altcoins are dangerously difficult to trade lately, which is pushing more and more money back into BTC or stablecoins. It’s an unsurprising trend pointing straight at the fear currently possessing the market.
B…b…But, What About the Halving?
Isn’t the halving supposed to make all BTC hodlers rich? Wasn’t the ride up to the moon supposed to have started by now? …What gives?
We hear you – and, to be quite honest, we’re not sure what gives, either. However, compared to past halvings, the stakes at this stage in the crypto game are WAY higher than ever before. The sheer amount of deep pockets in the market nowadays, along with the king-making rewards to be gained from playing the next halving right, make the approach less straightforward than ever before.
With that in mind, you can count on the games to continue well into
Q1. The question on everyone’s mind in this dangerously close standoff is: How low will bears push before flipping the switch? Bulls and bears are two sides of the same coin. Bears who are pushing for the lowest possible price today will simply step over the line and go long tomorrow once they’re satisfied.
To that end, resist dogmas, narratives, and stay flexible. In times like these, your best defense is an open mind, a patient outlook, and slow movements.